Bhavish Aggarwal's Krutrim lays off 100 employees just six months after hiring them

Bhavish Aggarwal-founded artificial intelligence (AI) startup Krutrim has laid off around 100 employees just six months after hiring them, The Economic Times reported.

While the startup didn't reveal the exact number of employees affected, the layoffs primarily impacted its linguistics division, which had been tasked with training and evaluating the firm’s AI assistant, Kruti, in at least 10 Indian languages, including Tamil, Telugu, Odia and Marathi.

The layoffs, which occurred last week, mark the startup's second round of job cuts. In June, Krutrim had reportedly let go of more than a dozen employees as part of an earlier restructuring move.

"As part of a strategic realignment and our commitment to efficient capital deployment, we are building leaner, more agile teams," the startup told the publication. It added that the transition was in line with “evolving business priorities.”

Krutrim was launched with considerable ambition to develop India’s first full-stack AI platform. In January, it became the country’s fastest AI startup to attain unicorn status after raising $50 million from Z47 (formerly Matrix Partners India). It had previously announced a plan to invest Rs 2,000 crore in AI development through its Krutrim AI Labs, with intentions to increase that to Rs 10,000 crore next year.

Despite its bold projections, the startup has reportedly scaled down its fundraising target to $300 million from an initial $500 million, amid tepid interest from investors. Its large language model and cloud products, launched in 2024, have failed to gain significant traction, with some startups reportedly migrating to more established hyperscalers, reports said.